Beacon Commerce Blog

KPIs every Amazon seller should know

Jun 25, 2024

The Amazon e-commerce sales channel is a potentially lucrative business opportunity for many brands.

At the same time, managing a successful business on Amazon isn’t easy. It demands a keen, constant eye on key performance indicators (KPIs) that provide valuable information about your sales performance, operational efficiency and advertising effectiveness.

First, you need to understand what these KPIs are, and how they can help you make informed decisions to optimize your Amazon seller strategy and drive business growth. The more you know your numbers, the more profitable your business will be.

Here’s an overview of the essential KPIs to watch for success in the Amazon marketplace:

Amazon Sales Performance Metrics

Total Sales

Total sales, often referred to as Gross Merchandise Volume (GMV), is the cornerstone metric for assessing your business’s overall performance. This includes both organic and paid sales. Monitor total sales to gauge the effectiveness of your product listings and overall market demand.

Units Sold

Tracking the number of units sold provides insight into the popularity and sales velocity of individual products. It’s crucial for inventory management and identifying top-performing products that might need restocking.

Conversion Rate

Your conversion rate measures the percentage of visitors to your product listings who make a purchase. A high conversion rate indicates that your product detail pages are effectively persuading customers to buy. Continuously optimize your listings through enhanced images, compelling descriptions, and competitive pricing to improve this metric.

Buy Box Percentage

The Buy Box percentage reflects how often your product appears in the Buy Box, the primary call-to-action on Amazon for purchasing. Winning the Buy Box drives sales, especially for products sold by multiple sellers. Factors influencing this metric include price competitiveness, stock levels, and seller performance metrics such as feedback rating and order defect rate.

Amazon Customer Satisfaction Metrics

Customer Feedback and Reviews

Positive customer feedback and high ratings build trust and credibility. Regularly monitor and respond to customer reviews to address any issues and improve your products and service. Address any negative feedback promptly to mitigate potential damage to your reputation. Get more tips for positive Amazon reviews, ratings and feedback.

Order Defect Rate (ODR)

ODR is a key indicator of your overall service quality. It includes negative feedback rate, A-to-Z Guarantee claim rate, and chargeback rate. Maintaining a low ODR helps you win the Buy Box and avoid account suspensions.

Return Rate

The return rate provides insight into product quality and customer satisfaction. A high return rate could indicate issues with the product or misleading product descriptions. Analyzing return reasons can help you identify and rectify problems to enhance customer satisfaction.

Amazon Seller Key Performance Indicators

Amazon Advertising Metrics

Total Advertising Cost of Sales (TACoS)

TACoS measures the efficiency of your advertising spend in relation to your TOTAL sales by comparing your ad spend to total sales generated. A lower TACoS indicates efficient spending on ads as it relates to the TOTAL sales generated for the brand. This is a true measure of your brand’s profitability on the platform. Use it to make decisions related to increasing your ad reach to further grow your brand.

Return on Advertising Spend (ROAS)

ROAS measures the revenue generated for every dollar spent on advertising. A higher ROAS indicates more effective ad spend. Regularly analyze and optimize your campaigns to improve this metric, focusing on high-performing keywords and ad placements.

Click-Through Rate (CTR)

CTR measures the effectiveness of your ad creatives and keywords by comparing the number of clicks to the number of impressions. A high CTR indicates that your ads are appealing to the target audience. Testing different ad copy, images, and targeting strategies can help improve this metric.

Impressions and Clicks

Impressions and clicks are metrics that indicate the reach and engagement of your ads. Impressions reflect how often your ads are shown, while clicks show how many users are interested enough to learn more about your product. Increasing these metrics ensures your ads are seen by an ever-wider audience and are compelling enough to generate interest.

How is your Amazon business doing?

The KPIs described above provide a comprehensive view of your Amazon business’s health and performance. Be sure to monitor and analyze these metrics regularly to identify areas for improvement, optimize your strategies and drive sustainable growth. Success on Amazon comes from paying attention to sales performance, customer satisfaction, advertising efficiency and your overall operational excellence.

If you need help understanding how your Amazon business is doing, and how you can do better, book a call with us and let’s discuss.

Thank you for your interest!

The Shine on Amazon Contest opens April 15 at 9 am ET. Submit your email address to be notified when it goes live!